Advanced Micro Devices said it would introduce, in the first half of 2004, low-power versions of its Opteron chip for servers that will be capable of working inside blade servers and other dense computers.

The Sunnyvale, Calif., chipmaker announced its plans Tuesday at the Embedded Systems Conference in Boston.

Blade computers have been the next big thing for more than two years, but analysts and companies say that interest in these systems is beginning to grow. Blades are extremely thin versions of regular servers that slide compactly into a specialized rack. Not only do blades take up less room, thereby saving space and cost, but also they typically come with management software that makes it easier to replace damaged servers or update software.

The compactness of blade systems, however, creates a need for efficient power consumption. Excess energy creates heat, which in turn can knock out or even melt servers. Next year's low-power Opetron chips will consume a maximum of 55 watts and 30 watts of power, according to the company, less than most high-end desktop chips consume today.

Released this past April, the Opteron represents AMD's best chance to date to significantly penetrate the server market. The chip can run both 32-bit software, like most other Intel and AMD chips, and also more advanced 64-bit versions of the same software. Computers with 64-bit processors that are loaded with the right software can handle far more memory and run applications such as databases or video-editing systems more efficiently.

IBM has said it would come out with servers and workstations based around the chip. Sun Microsystems, which will be increasingly selling more servers based on chips other than those from its UltraSparc line, has promoted the chip as well, and some executives have said the company would use it sometime in the future.

"We are seeing phenomenal performance on Opteron. We are running Solaris on Opteron in our labs," Jonathan Schwartz, executive vice president of software at Sun, said in a recent interview. "Intel and AMD are really important" to the future of Sun, he added.

Still, the server market is notoriously conservative, and even AMD executives concede that it will take time and effort to build an ecosystem for Opteron. A 64-bit version of Windowsfor Opteron won't come out until the first quarter of 2004. A desktop version of the chip, called Athlon64, is due Sept. 23.

"AMD is once again entering new markets and offering additional choice to our customers," Marty Seyer, vice president of AMD's Microprocessor Business Unit, said in a statement.